The head of the Lackawanna County Housing Authority said Tuesday former board Chairman Patrick “Nibs” Loughney ordered him to hire his son two years ago even though the agency’s solicitor warned it would be a conflict of interest.

Executive Director James Dartt said Mr. Loughney, the mayor of Dunmore who was board vice chairman at the time, also directed him not to tell other authority board members about the hire.

“In hindsight, I should not have succumbed to the pressure, and I should have informed the board,” Mr. Dartt said.

The new chairman, attorney Paul Walker, said the board still has “absolute confidence” in Mr. Dartt’s leadership after an audit report hammered the authority over the hiring of Mr. Loughney’s son and other areas of noncompliance with U.S. Department of Housing and Urban Development requirements.

The agency has already made changes and adopted policies — some while the audit was underway and others since the issuance of the report — to resolve the deficiencies cited by HUD’s Office of Inspector General, he said.

“We want to be compliant is what it comes down to,” Mr. Walker said.

Among other findings, the report said the authority violated its contract with HUD when it hired Mr. Loughney’s son, also named Patrick, as a maintenance worker in January 2012. HUD rules prohibit the hiring of an immediate family member of a board member or agency administrator as a conflict of interest.

The report said two board members pressured Mr. Dartt to make the hire. Although neither Mr. Dartt nor Mr. Walker would name the individuals, Mr. Walker said neither is still on the board.

The only people on the board then who are not members now are Mr. Loughney and Gerald Langan. Mr. Loughney resigned in November; Mr. Langan’s term ended in January. Efforts to reach both men Tuesday were unsuccessful.

Mr. Dartt said the pressure came in the form of repeated requests to hire Mr. Loughney’s son, beginning in the early fall of 2011, even after he insisted it could not be done under HUD policy. Attorney Gerard Karam, the authority solicitor, said he also was asked about the prospective hire and agreed it would be a conflict of interest.

The requests persisted into November and December of 2011, Mr. Dartt said.

“I said, ‘We can’t do it. It’s a conflict of interest, against the policy,’ and I was told to do it anyway, and don’t tell any other board members,” Mr. Dartt said, adding the directive came from Mr. Loughney.

Mr. Walker and Mr. Karam said they did not learn of the hire until after the launch of the audit, which was prompted by an anonymous complaint.

Mr. Loughney’s son is still employed by the authority as a project manager at the Throop and Jermyn sites, a job for which Mr. Dartt said he is qualified. Mr. Karam said the inspector general did not object to the younger Mr. Loughney’s continued employment as long as his father resigned from the board.

A new hiring policy, developed with the assistance of Mr. Karam and the inspector’s general office, was adopted by the authority in November and requires full-time positions to be advertised. Although the board is not involved in the hiring process, the executive director must inform the board of his final decision regarding both full-time and part-time positions.

The administration must also continue to adhere to the nepotism prohibitions outlined in the HUD rules.

Mr. Walker said the pressure exerted on Mr. Dartt to make a hire “is never going to happen again.”

“I don’t know that he knew what to expect from the other board members,” he said. “My answer was, ‘Don’t ever worry about that. Do what’s right, and I’ll always have your back.’”

In addressing other deficiencies cited in the report, authority officials said the board:

■ Adopted a policy requiring interfund payables outstanding at the end of the month to be repaid by the 15th day of the following month. Although there was no suggestion funds were mishandled, the report said the authority allowed an interfund balance of $370,234 to accumulate, indicating the need for more timely settlements.

■ Established a separate vehicle use policy, which was previously part of the personnel policy. The report said the authority faced an “undue risk” as a result of its employees’ personal use of authority-owned vehicles.

■ Agreed to use the federal System for Award Management to screen contractors, landlords and other business partners who may be excluded from participating in HUD-funded activities. Mr. Dartt said the authority had been using the state exclusion list.

Contact the writer: dsingleton@timesshamrock.com

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